At 6.7 percent, Argentina’s monthly inflation rate has now drawn level with the highest figures of the early 1990s, when then-president Carlos Menem and economy minister Domingo Cavallo were forced to resort to a currency board known as “convertibility” that tied the value of the peso to the US dollar on a “one-to-one” basis to tame hyperinflation. As President Alberto Fernández tends to his newborn son, Francisco, along with First Lady Fabiola Yáñez at the official residence in Olivos, the civil war within the ruling Frente de Todos coalition rages on, keeping the country on the verge of a nervous breakdown. With Cristina Fernández de Kirchner making it clear where the real power lies in a speech this week, the president is looking to shuffle his Cabinet and re-launch his administration one more time – but he isn't willing to give the Kirchnerites Martín Guzmán’s head while doing it.
The latest inflation figures released by the INDEC national statistics bureau are extremely troubling. In a global context of rising prices, as a consequence of the pandemic and the war between Russia and Ukraine, Argentina’s numbers are amongst the highest in the world. They are also the consequence of domestic tensions that haven’t been resolved at least by the previous three administrations, including this one. Guzmán and his team have clocked in an annual inflation rate of 55.1 percent over the past 12 months pushing yearly expectations as measured by the REM expectations report put out by the Central Bank north of 60 percent — the worst figures seen since hyperinflation. Even if these figures were expected, they have raised the ante for everyone involved.
The recent debt restructuring agreed with the International Monetary Fund contemplated an annual range of 38 to 48 percent for price increases in 2022, meaning one of the pillars of the deal had been demolished before the plan even came into action. Guzmán, who is sitting on the hottest seat in the house, appears confident. In a TV interview during the week he reiterated the president’s support, saying it is “obvious” that he will remain in his post. The strongest words, uttered in his traditional soft manner, were aimed at the aforementioned internal adversaries, with Guzmán noting they would govern “with those who are aligned with our economic plan.” The direct blow at the Kirchnerite bloc was preceded by calls for unity and political support, yet it drew a line in the sand.
As journalist Rosario Ayerdi recently reported in Perfil, Alberto was already working on a plan to “relaunch” his administration after the Easter weekend. He had no intention of consulting with his vice-president and political partner, and apparently wouldn’t be willing to move on the frontlines of his economic team, which also includes Productive Development Minister Matías Kulfas and Labour Minister Claudio Moroni. Cabinet Chief Juan Manzur is another one who has been walking a tightrope, yet President Fernández sees him as a “trophy minister” to show the Peronist Governors he’s running a federal administration. Thus, it would seem that Alberto and his team could have second- and third-line officials in their sight. This could mean a direct confrontation with Vice-President Fernández de Kirchner if indeed he’s considering sacking the likes of Commerce Secretary Roberto Feletti or the recently formed “energy trio” consisting of Secretary Darío Martínez, Undersecretary Federico Basualdo, and Enargas Director Federico Bernal. All three of them will be responsible for executing the aggressive hike in energy bills that Guzmán agreed to with the IMF and that Cristina has opposed vehemently considering it an election killer. They all receive their political instructions from the Instituto Patria, the Kirchnerite think-tank.
Within the Kirchnerite field, no-one responded directly to Guzmán’s apparent provocation. It was none other than The Dame herself who came out to speak this week, though. Inaugurating the Euro-Latin American Congressional Assembly, Fernández de Kirchner took the stage at the CCK cultural centre in Buenos Aires to deliver one of her usual monologues on global geopolitics with thinly veiled darts aimed at the United States and other Western powers. Also as usual, she used the international stage for domestic politics as she noted that “receiving the presidential sash and baton” isn’t what real power’s all about. “Believe me, I say it from experience,” she added, going on to ironically suggest it is even less powerful “not to do the things you’re supposed to do.” The implication was clear. “I’ll just leave it there,” she added in an obvious message to Alberto. Clearly telling the president who holds the votes and the real power, CFK also brought the attention back to her first mandate which found her in a similar position, with husband Néstor passing on the job title but not the last word. Toward the end of her speech, for good measure, Fernández de Kirchner brought it back to her own personal issues. reminding the audience that she had been persecuted by the “Judicial Party,” sending another message to the president. As long as the Judiciary is on her tail she will never leave her guard down.
The civil war between the Albertistas and Kirchneristas has paralysed Argentina’s political agenda. Congress and the opposition are waiting for some sort of resolution. Lower House Speaker Sergio Massa, the third wheel in this dysfunctional relationship, continues his balancing act. Without hiding his presidential aspirations ahead of 2023, the idea of a triumphant entrance into the Cabinet to save the day has been floated around since the early days of the Fernández-Fernández presidency. Manzur beat him to the Cabinet chief post, but has proven to be absolutely irrelevant, and the possibility of a centralised “super Economy Ministry” under the Tigre leader’s control seems to contradict the idea of not giving up Guzmán’s head. As usual, Massa keeps his cards close to his chest. Within the opposition Juntos por el Cambio coalition, Buenos Aires City Mayor Horacio Rodríguez Larreta continues to try and build a consensus candidacy around himself, but everyone from neurosurgeon Facundo Manes to former president Mauricio Macri are trying to pull the carpet from under his feet.
In the meantime, Alberto can continue to enjoy baby Francisco and Cristina can spend time with granddaughter Helena. The rest of us will just have to wait for them to figure it out.